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Urgent notice to Owners of Diamond Condo! Contact us now to get your condo SOLD! Ready buyers & tenants awaiting you. 

We are delighted to announce that we have ready buyers looking to own a unit of condo in Diamond Villa, Tanjung Bungah, Penang, therefore if you are contemplating a move or know of someone who is, please contact us by clicking here.

For your kind information, the potential buyer is a serious buyer and willing to consider your condo subject to the right unit, condition and price. 

We welcome all keen sellers to contact us to further discussion on the sale of Diamond Villa, Tanjung Bungah, Penang. We have ready and motivated buyers waiting to buy at the right unit, condition and price. Act now! Opportunity to get your Diamond Villa, Tanjung Bungah, Penang SOLD now.

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Don't wait, contact us immediately if you would ever like your Diamond Villa, Tanjung Bungah, Penang SOLD instead of JUST LISTED. We have a proven marketing programs for getting your Diamond Villa, Tanjung Bungah, Penang sold.

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Mah Sing will use new capital to expand landbank

Artist impression of Lakeville Taman Wahyu

FRESH from a rights issue exercise that will raise RM630mil to finance its landbanking strategies and a whopping unbilled sales register of RM5.1bil, Mah Sing Group Bhd is on a strong financial footing to further bolster its market leadership position and to make foray into new markets.

Its healthy balance sheet will be given a further boost by the fast project turnaround model it adopts where the time frame from the purchase of a land to the launch of the project only takes between six and nine months - a hallmark of this Kuala Lumpur-based property group which also has projects in Iskandar Malaysia, Penang and Kota Kinabalu, Sabah.

Group managing director cum group chief executive Tan Sri Leong Hoy Kum shares that Mah Sing has many plans in store for 2015 to enhance and solidify its market position.

“We look forward to deliver properties sold in the past that will realise the unbilled sales that will translate into cash for the project developments and redemption of our financing. The cash proceeds from the rights issue will be used to finance the group’s property development activities, land acquisitions and general working capital requirement ,” Leong tells StarBizWeek. 

Mah Sing has a net gearing ratio of 0.37 times as of end September 2014, and the RM5.1bil in unbilled sales together with the rights issue proceeds of RM630mil give the group a very healthy and strong balance sheet that will allow them to acquire more landbanks for their further expansion.

The group aims to repeat its sales feat of RM3.4bil posted last year, and this will be driven by new launches to the tune of RM3.4bil this year and the sales of the remaining units launched last year. 

Artist impression of Southville City, Bangi.

Sales this year will mainly be derived from Southville City Bangi, M Residence 1 & 2 @ Rawang, Lakeville @ Taman Wahyu, MCity, Icon City, Ferringhi Residence 2, Meridin Bayvue @ Sierra Perdana, Sutera Avenue and Meridin @ Medini.

And in the second half of 2015, Mah Sing will unveil a number of new projects, namely Bandar Meridin East @ Iskandar, M Residence 3 @ Rawang, Star Residence in Subang and Icon Residence in Penang.

Leong says Mah Sing is focusing on four property hot spots of the Greater Kuala Lumpur area, Iskandar Malaysia in Johor, Penang and Sabah. Greater Kuala Lumpur makes up about 67% of its sales and the rest comes from Johor (20%), Penang (11%) and Kota Kinabalu, Sabah (2%).

It is also exploring Malacca and Ipoh for landbanking and development opportunities.

Sales to foreign buyers notably from Singapore, China, Taiwan, Hong Kong and Indonesia presently make up 8% of the total sales. Leong is confident the trending down of the ringgit vis-a-vis the US dollar will raise the foreign buying interest, and Mah Sing can look to raise its foreign sales ratio to 15% of the group’s sales going forward. 

Mah Sing’s rights issue of three rights shares for every 10 ordinary shares and 3 free detachable warrants for every 10 rights shares at RM1.42 per rights share will raise RM630mil, of which RM530mil will be allocated for land acquisition and property development activities, and the balance for general working capital and payment for expenses incurred by the rights issue.

Leong: ‘The cash proceeds from the rights issue will be used to finance the group’s property development activities.’

Leong says of the proceeds, RM370mil will be for part payment for the acquisition of land in Puchong and Seremban, which will have an estimated gross development value (GDV) of RM9.3bil and RM7.5bil, respectively. It will also be used for development expenditure.

The new rights shares and warrants will be listed on the Main Market of Bursa on Feb 26. Leong has given his undertaking to subscribe for his entitlement of 34.6% under the rights issue in full. The balance will be underwritten by CIMB Investment Bank, Maybank Investment Bank and Affin-Hwang Investment Bank as joint underwriters.

Giving their thumbs up for the rights issue, 12 research houses have made Mah Sing their top sector pick. 

CIMB’s Terence Wong says Mah Sing’s rights issue will allow it to pursue a sustainable aggressive landbanking for a robust sales and earnings growth outlook, adding that the dilutive effect from the rights issue should be offset by stronger longer-term growth prospects from its aggressive landbanking efforts.

“With the RM630mil proceeds, Mah Sing has leeway to gear up its balance sheet by another RM1bil while maintaining its net debt to equity ratio of around 0.5 times. The timing of landbanking could also be good as landowners may be more reasonable in their asking price,” he says in a recent note.

TA Securities says the rights issue will help to fund Mah Sing’s landbanking activities and drive future earnings growth.

Post the proposed rights issue exercise and major cash commitment allocated for three parcels of land located at Sultan Salahuddin Abdul Aziz Golf Course, Seremban land and Puchong land, Mah Sing’s net gearing will improve to 0.2 times from 0.5 times in FY2015, indicating higher gearing headroom of up to another RM1bil new borrowings for future land acquisition, TA Securities says.

The affordability factor

The development of the Puchong and Seremban land is expected to be previewed around the end of this year, and Mah Sing expects revenue contribution to commence from 2016.

“We intend to preview the projects this year and the projects’ commencement will further propel our healthy and strong balance sheet to continue with more strategic and timely landbanking opportunities for the expansion of the group,” Leong says.

The 88.7 acres of land in Puchong fronts a lake and the Kelang River.

The project to be developed over 10 years will comprise a proposed integrated mixed development of serviced residences (priced from RM585,000), office towers, shop offices, retail lots, a retail mall and a hotel with an estimated potential GDV of some RM9.3bil. The project plan is subject to approvals from the relevant authorities for the development components.

Leong says the group has also been granted the right for an additional 170.58 acres next to the land, for outright sale or joint venture subject to terms and conditions to be mutually agreed upon with the vendor.

As for the Seremban land, he says the decision to acquire the 960 acres freehold land that straddles the North South Highway follows the overwhelming success of Southville City which has seen a 99% take-up rate of the first five blocks of Savanna Executive Suites, priced from RM338,000, and more than 80% take-up for the 2½-storey Avens Residence Superlink Homes.

“This demonstrates the trend of developments moving south in Greater KL, which is a large catchment area for acquirable homes south of the Klang Valley,” he says. 

Leong explains that a key catalyst for the project will be the proposed Kuala Lumpur-Singapore high speed rail project with Seremban as a potential inter-city stop. Mah Sing will propose a direct interchange from the North South Highway to the land.

The development will include terrace houses with indicative price from RM350,000 a unit, superlink houses, semi-detached units, and bungalows, while the commercial component will include serviced apartments, shops, offices and a retail mall.

Given the softer property market outlook, Leong says Mah Sing is targeting the mass and mid-range market in heeding the Government’s call for more affordable housing to be provided to the people.

He says the mass housing market is still attracting good response because demand for residential houses still outstrips supply. 

Total transactions for residential properties in the past few years numbered more than 200,000 transactions a year, while the number of newly completed houses was only around 70,000 to 80,000 units a year.

Last year, 87% of Mah Sing’s residential projects were priced below RM1mil, and for 2015, 84% of its launches will be priced below RM1mil, of which 71% will be below RM700,000, and 44% below RM500,000.

“While we have a mixed portfolio of products ranging from residential and commercial to industrial properties, more acquirable housing will be launched to provide opportunities to first-time buyers, upgraders, and also middle-income earners,” he stresses.

Leong says the strategy to serve the mid-range market has reaped good results, as evidenced from the successes of project launches in the mass market and mid-range segment projects that include Savanna Executive Suites in Southville City, Bangi; Lakeville Residence in Taman Wahyu, Kuala Lumpur; D’sara Sentral in Sungai Buloh and Meridin Bayvue@Sierra Perdana.

“We will launch more mid-range products and we strongly welcome landowners with lands in good locations to approach us with their proposals. We have a dedicated business development team which is looking at land everyday,” he says.

Currently the group has 48 projects in its portfolio spread across the Klang Valley, Seremban, Penang, Johor and Sabah. Of these, 10 of the projects are nearing completion.

The new project launches this year will comprise Savanna Executive Suites @ Southville City, M Residence, Icon City, Lakeville Residence, D’Sara Sentral, Ferringhi Residence 2, Meridin Bayvue @ Sierra Perdana and Sutera Avenue. Projects in the pipeline also include Bandar Meridin East in Iskandar Malaysia, Johor; M Residence 3 in Rawang, Selangor; Icon Residence in Georgetown, Penang; and Star Residence in Subang Bestari, Selangor.

Given its savvy landbanking expertise and the wide spectrum of products available, Mah Sing can look forward to another busy year of new launches and strong sales. - The Star

Traits of a responsible housing developer

KNOCK, knock! Any “good” housing developers out there?

I am reluctant to use the words “good developers” as the words are not in my vocabulary. However, there are responsible ones and more are joining this category. 

The qualities of a responsible developer are to be emulated, if you can find them.

The housing industry has come a long way since the advent of large-scale housing development in the late 50s and early 60s. The players in those times were bona fide entrepreneurs. Most probably, conscience ruled and pride in workmanship, timely delivery of quality and affordable houses were their hallmarks. 

The present delivery system of “sell-then-build” through progressive payments is fraught with risks for the unsuspecting house buyers.

These second generation housing developers, “good” or bad, are used to the lucrative profits from the housing industry. This is so because the post-independence period has been a period of high population and economic growth. Hence, the demand for housing is ever increasing. In a sellers’ market, the buyers are always at a disadvantage. When greed is inversely proportionate to conscience among industry players, the situation can get very bad indeed.

We often hear of developers lamenting about the shortage of workers (legal or illegal, skill or inexperienced), shortage of building materials, complying with new laws or regulations that made it hard for them to complete their projects on time. At the same time, we also hear of projects making multi-million ringgit in profits for the developers and we do not see or hear news of housing developers retiring or quitting the business entirely. 

This would mean that the housing development is still a lucrative business. In fact, more rookie developers are joining the arena because the sell-then-build system allows them to make money from people’s money. 

It has become a ‘riskless venture’ where profits are guaranteed, and in the worst scenario, the government will mop up the abandoned housing project, befitting the adage: Profit Privatised, Losses Nationalised’

Enough of the bad ones, we at HBA do keep our ears opened for the qualities of responsible developers to be emulated. In the first place, how do buyers judge if their developers have been responsible? The construction industry is a unique field. It is one of a few professions where no formal education is required. 

There is no formal award giving ceremony by buyers to tell the world their developers have been ‘good’ and responsible.

There are also some other things the responsible developers do that prove they have a passion for their profession. Here are some of the traits practised by responsible developers.

Attention to environment and existing neighbourhood

Responsible developers do not just depend on their buyers to pass the word around about their reputation. No new project is an island. There are existing neighbouring projects, trees etc. A responsible developer ensures the existing neighbourhood is not disturbed by their new development. 

If there are complaints, such as cracks, a landslide and floods that the new construction is causing to the existing neighbours, they are quickly attended to. They also ensure that the existing roads are kept clean regularly from construction activities.

Amenities, facilitiesand infrastructure

Developers who provide adequate amenities and facilities like playgrounds, schools, markets, community halls and even police booths are not only fulfilling the obligations imposed by the local council but also their social responsibilities to society. These developers are commendable as good corporate citizens. It enhances their image too. There are also developers who invest and build infrastructure first prior to selling their houses.

Takes pride in quality and timely rectification

Whether low-cost or high-cost houses, chasing the developer to rectify shocking defects, bad workmanship is a nightmare to buyers who lose out while waiting for repair works. 

Responsible developers do their own quality checks before handing over their products. Caring developers do practise the following before handing over their products:

• Adopt quality checks at all stages of construction, test and commissioned utility supplies;

• Clear and clean individual units and construction site of debris;

• Ensuring the Certificate of Compliance and Completion (CCC) is obtained with the handover of units;

• Retain a team of competent workers to do rectification promptly if there are complaints on defects.

• Keeping sufficient stock of products like floor tiles of the same quality and make.

Some developers even extend the mandatory defects liability period of 24 months. We have also heard of developers providing alternative lodgings for their buyers while waiting for defects to be corrected.

Timely delivery

Time is the essence of the contract of sale and purchase. Houses should be delivered within the time stipulated in the sale and purchase agreement ie within 24 months for ‘land and building’ and 36 months for ‘building intended for subdivision’. If, for whatever reason, there are delays, compensation should be paid immediately to buyers without second thoughts or finding devious ways to ‘short-change’ the buyers.

Responsible developers keep their buyers informed of delays and tell them of the next expected delivery date. Some buyers even told us of the extras they have received at delivery time, which surely endear them to the developers. These are some of the ‘welcome packs’ that they have received: useful gifts like a key box; warranties from paint companies, auto-gates, pest control, electrical appliances; certificates of treatment for termites / pest control; a certified copy of the CCC issued by the architect and certified copy of the building plans and plans that relate to electrical wiring and water piping so as to facilitate future renovation.

Interest charged

One clause in the sales contract states that the buyer is responsible for late payment interest. It is a common complaint by buyers that their developers would charge interest for late payment even though it is the fault of the end-financier or their lawyers doing the legal documentation. Responsible developers assist in ensuring that the documentations are in order and the buyer is not burdened with any late payment interest.

Joint Management Body (in stratified projects) 

Responsible developers assist their buyers to form committees and be prepared for the formation of the management corporation. These developers realise that the projects they have developed will eventually pass to the owners to maintain and manage.

Encouraging community living

Developers who encourage forming of resident/ owners association are a welcome lot. Some even go to the extent of contributing monies for the formulation of buyers representative group for a meaningful channel to voice grievances. Some even provide meeting facilities and allocate a multipurpose room for the elected representative group.

Good communication

The line of communication should always be open between buyers and their developers: 

• Keeping buyers informed of the ongoing projects and their products;

• Developers not to appear having shun away from their responsibility;

• Treating the buyers with respect as buyers can serve as their marketing tool. Show respect and you will gain respect;

• Transparency and accountability on monies collected;

• Providing regular accounting reports and budgets;

• Voicing of any grievances rather than through the media, which will bring adverse effect to the detriment of both parties.

Build first then sell 

There is no step that can be more pronounced than for housing developers to adopt the absolute ‘built first then sell’ so that potential buyers can see for themselves the finished product before buying. We believe that in this way, most of the present day ailments afflicting the housing industry can be avoided and the housing industry will be a lot more orderly. 

In the interim period, responsible developers have embarked on the Built then Sell (BTS) 10:90 concept where the buyers pays 10% and the balance of 90% to be paid upon completion of the house. They are already big names among developers that find the BTS 10:90 concept workable and feasible and are targeting to achieve the Government aspiration of making BTS 10:90 

There are responsible developers whose names are synonymous with quality and trust. They are able to win over buyer’s confidence. Today, they have created their own brand names. No wonder some developers do not advertise, yet all their units are sold out even before the official launch.

Chang Kim Loong AMN is the secretary-general of the National House Buyers Association. - The Star

Housing affordability worsens with Sabah top of list, Penang, KL

KUALA LUMPUR: Housing affordability, which is based on the ratio of average terraced house price to average household income, has worsened over the past five years, according to Rahim & Co, Chartered Surveyors Sdn Bhd.

In its survey of the Malaysian property market 2014/2015, the ratio increased from 3.4 in 2009 to 3.6 in 2012 and 2014.

“This essentially means that an average terraced house would cost an average household or family in Malaysia, 3.6 times its annual gross income.

“The least affordable terraced house in Malaysia in 2014 was recorded for Sabah (6.2 times), Penang state (5.9 times) and Kuala Lumpur (5.6 times). Sarawak was fourth with a ratio of 4.4 times,” the survey showed.

Rahim & Co, which is one of the largest real estate consultancy companies in Malaysia, also said in its outlook that transaction activities in the residential sector after expected to soften with the implementation of the Goods and Services Tax (GST) in April 2015.

Other factors are lower crude oil prices, which had collapsed by nearly 50% from a high of US$100 in June to below US$50 now, and a weakened currency.

However, market interest along main transport and infrastructure corridors remains robust spurring new transit-oriented-developments and townships, particularly in the Klang Valley.

To recap, Rahim & Co said that over the past four year, property prices were fuelled by the nation’s development plans, investment concentration and also the rapid growth in Iskandar Malaysia.

“The cautious market sentiment echoes the state of property market in reaching its plateau and reconciliation period is expected in the near future,” it said. - The Star

Property market to consolidate, foreclosures seen rising

KUALA LUMPUR: Property prices in Malaysia are expected to consolidate this year after seeing a rebound in the first half of 2014, said property consultancy Rahim & Co.

Executive chairman Tan Sri Abdul Rahim Abdul Rahman said the market rebounded after a slowdown in 2013, with higher transaction numbers recorded in the first half of 2014, compared with the corresponding period a year earlier.

Rahim was speaking at a press conference which saw the launch of the company’s Property Market Review 2014/15.

He said the first half of 2014 saw a 3.3% growth, or 193,405 transactions, versus a year earlier. The value of the transactions was RM82bil, an increase of 19.3% from the first half of 2013.

The double-digit increase in value, as opposed to a less than 5% growth in the number of transactions, indicates that average prices are still increasing. The pace of growth would be “slower” in 2015, he said.

Despite the slower growth and the oversupply of high-rise condominium units, there was a huge appetite for land, said managing director Robert Ang.

The company received “overwhelming response” for the tender of two pieces of German government land which closed earlier this week.

The Jalan Kia Peng land had a guide price of RM2,300 per sq ft and the Jalan Tun Razak plot at RM1,500 per sq ft.

Notwithstanding that, the current consolidation of completed units is expected to give rise to more foreclosures going forward.

“But strong liquidity will be able to absorb this,” said Ang.

This is largely due to the various completed schemes entering the market purchased with small downpayments a few years ago. Buyers may not be able to flip with the high margins they had expected earlier and they may not want to go ahead with the mortgage payments.

The rentals may not be able to cover mortgage payments. This may result in the weaker ones falling on the wayside, said Ang.

He said a number of foreclosures in a popular location in the Klang Valley were taken up very speedily – despite built-up areas of 2,000 sq ft and above – which indicates high liquidity.

As for the performance of the various sub-sectors, interest in residentials is expected to continue, particularly for units located along up-and-coming highway projects and public rail transportation.

The office sector remains challenging, especially for smaller and older office buildings in the Klang Valley. Occupancy rate is expected to be stable at about 80%. Incoming supply of about nine million sq ft over the next three to five years is expected to put greater pressure on rents and competition.

Effective rental rates have been declining due to longer rent-free periods, landlord providing renovation costs and rental review clauses which favour tenants.

In the retail sector, new malls are expected to boost real estate investment trusts. Rentals are expected to stabilise. Consumer spending is likely to be restored in the second half. The weaker ringgit could boost tourist expenditure.

On the industrial sector, demand is for properties in managed industrial parks, instead of standard lone lots. - The Star

Rental a source of income or problems?

Landlords and tenants both need each other, yet their interests can be conflicting. Understanding each other helps both parties.

ALMOST everyone is a landlord or a tenant, and sometimes a person may be both. Both have advantages and disadvantages. Where property has been bought cheaply, it would be felt that the landlord is getting good returns. 

It often transpires that the landlord does not eventually agree to rent the premises to the interested person. 

On the other hand, the potential tenant may, after viewing the premises and meeting the landlord, not want to pursue the matter.

Whether a person wants to buy a house and live in it or to be a tenant is very much a matter of circumstances and choice. 

Some may want to rent a house first and then over time make an assessment whether they will feel comfortable, good and happy in the area before seeking to buy a house there. 

A landlord would want to have a good tenant who will regularly pay the rental and not damage the premises. 

The tenant would, other matters being agreed upon, hope for security of tenure. This means he will not be asked to vacate after a few months or even years.

Even when most aspects are agreed to, the landlord or tenant may not see eye-to-eye on some matters. 

A reader in the Klang Valley said that the landlord insists on six post-dated cheques at one-month intervals being handed to him at the outset. 

Is he entitled to do this? Why cannot the landlord collect the cheque every month or allow him to bank the rental into his account?

A contract

What is agreed to between a landlord and tenant will be the contract. It is only natural that all the conditions and terms are discussed, and parties are free to agree or otherwise. If there is no agreement, there is no contract.

The demand for such a mode of payment may arise out of fears that the rent may not be paid punctually or paid at all for several months. 

This can be a great inconvenience because the landlord may be staying in one corner of Kuala Lumpur and the rented house may be in another. 

There are cases where tenants keep on postponing the date of payment and the landlord cannot be expected to make calls to remind the tenant or travel to the premises to chase up. 

A dishonoured cheque would provide immediate written evidence of default.

Some landlords also find the offer of the tenant to bank the amount into their bank account not acceptable because the landlord does not wish to disclose his bank account number. 

Then there may be occasions where the rent is not banked in but when the landlord calls up the tenant he insists the rent has been banked in, resulting in the landlord having to check with the bank. 

Finding no such funds banked in, he may end up calling the tenant only to hear the voicemail! 

Remedy

When the tenant neither pays the rent nor hands back the premises, what can the landlord do? 

One option would be to commence an action to obtain vacant possession and recover the arrears. 

Upon expiry of tenancy or termination, the tenant is wrongfully holding onto the premises. 

This exposes the tenant to double rental.

Section 28(4)(a) of the Civil Law Act 1956 provides that “Every tenant holding over after the determination of his tenancy shall be chargeable, at the option of his landlord, with double the amount of his rent until possession is given up by him or with double the value during the period of detention of the land or premises so detained, whether notice to that effect has been given or not”.

In years gone by, the proceedings dragged on for different reasons for different lengths of time and a tenant was able, with exceptions, to stay until an order for possession was obtained and exercised. 

However, these days, some cases excepted, the court moves with greater speed. 

And if the matter is effectively dealt with the tenant can be ordered to be out in no time, but whether one could recover all the arrears of rental as well as the double rental can be quite another matter.

In some cases a landlord may be quite willing to allow the tenant to stay on as long as the rental can be recovered. 

For this purpose an even faster option is through an ex parte application to seize whatever assets the tenant has on the premises and the tenant will only know when the court bailiff arrives at the premises to execute the order.

However, this approach will only be available where there are assets in the premises which can be seized. 

The situation for the landlord will be unfavourable where the premises are let fully furnished. 

It might be thought that problems as to rental collection are peculiar to the bigger cities, where life is impersonal and people change jobs frequently and move from one place to another. 

However, a smaller town may grow and become a city and a person in the city may own property in a small town. 

On a different note, a tenant agreeing to all the terms but nevertheless being turned away by the landlord may have reason to be annoyed and upset. 

In such cases, tenants may think of ways to get around the landlord. One such instance is narrated at a site, http://lettingmyproperty.wordpress.com, perhaps as a joke, in the following words.

“A large family, with seven children, moved to a new town. They were having a difficult time finding a new home to live in. Many houses were large enough, but the landlords objected to the large family. 

“After several days of searching, the father asked the mother to take the four younger children to visit the cemetery, while he took the older three to find a home. 

“After they had looked most of the morning they found a place that was just right. Then the landlord asked the usual question, ‘How many children do you have?’ The father answered with a deep sigh. ‘Seven...but four are with their dear mother in the cemetery.’ He got the house!”

> Bhag Singh’s fortnightly column seeks to create awareness of legal issues on day-to-day matters. Any comments or suggestions for points of discussion can be sent to mavico7@yahoo.com. The views expressed here are entirely the writer’s own.

Setia Alam house buyers sue developer, PKNS

SHAH ALAM: Ten house buyers in Setia Alam here, have filed a lawsuit against a housing developer and Selangor State Development Corporation (PKNS).

Ruhani Baharum, 46, Tham Kok Pew, 53, Wan Mohd Wan Hashim Yusoff, 40, Mohd Nizam Abdul Rahman, 38, Hong Hong Chik, 41, Hing Aik Choong, 37, Ng Kim Thong, 45, Razmair Shah Abdul Razak, 37, Nordin Hisham Mohd Hanapiah, 46, and Ku Kean Thong, 45, filed the suit on Wednesday, through law firm S.Surendran  and  Co.

In their statement of claim, the plaintiffs said in 2010, Sazean Development Sdn Bhd initiated a residential development project on a 143-hectare freehold property known as Anjung Sari@ Bandar Setia Alam, owned by PKNS. 

They alleged that in 2010, they respectively entered into a sales and purchase agreement to buy a three-storey terrace house valued between RM548,888 and RM741,902.

They said a clause in the agreement stated that Sazean Development (first defendant) must provide vacant possession to the plaintiffs within 24 months from the date of the sales and purchase agreement.

The plaintiffs claimed they had not received vacant possession of their house, and Sazean Development's response to repeated queries was that the snag was due to PKNS' delay in giving the required approval.

According to the plaintiffs, they had paid nearly 95% of the purchase price of their house through bank loan to the first defendant.

The delay by Sazean Development in delivery of vacant possession was a breach of the terms in the sales and purchase agreement, they alleged.

The plaintiffs also claimed the first defendant's breach of the agreement was due to negligence, and PKNS' failure to ensure that the project was given to a reputable company with experience and financial standing, and able to complete it on schedule.

The actions of both the defendants, the plaintiffs claimed, had caused hardship as they could not reside in their dream home and consequently suffer losses as they were forced to pay rent while waiting to occupy it, or forego income from rental.

In this regard, the plaintiffs are seeking specific performance compelling Sazean Development to fulfil its obligations under the sales and purchase agreement.

Alternatively, should the first defendant fail to abide by the order, the plaintiffs want a declaration that PKNS together with Sazean Development must complete the project and deliver vacant possession of their homes in six months from the date of judgment, and bear the plaintiffs' losses incurred for rent and/or rental income opportunities.

The plaintiffs are also seeking a declaration that the two defendants were liable for liquidated ascertained damages, general damages, interest, costs and any other relief deemed fit by the court.

Meanwhile, Hong who acted as the plaintiffs' spokesman, told reporters that the action was taken as a last resort.

The writ of summons would be delivered to the two defendants Thursday. - Bernama

Penang hopes to reap RM2.2b from redevelopment of Jelutong dumpsite

The landfill was closed in 2002 but was later converted into a site for construction and demolition waste.

GEORGE TOWN: A request for proposal (RFP) to develop the 60-acre (24.28ha) Jelutong landfill site into Penang’s first eco-town featuring mixed development will be called next month, with the Penang government hoping to reap some RM2.2 billion from land premiums.

Speaking to The Edge Financial Daily, a government source said the documents are being finalised by the state executive council before the state’s investment arm, Penang Development Corporation (PDC), carries out the RFP.

The source said that the approximate 10-year project also involved the reclamation of about 20 acres of land on either side of the landfill to create a buffer, and reduce erosion and siltation along the coast and an adjacent river mouth. In total, the areas involved come up to 100 acres.

The source said based on land premium earnings, the state could expect to rake in about RM2.2 billion if the rate is set at a minimum of RM500 per sq ft. 

The state’s proposed concept and design for the eco-town features affordable housing units, a shopping mall, meetings, incentives, conferences and exhibitions  centre, green lung, an artificial public saltwater beach, an optional yachting marina and an iconic structure.

“The state government wants to grow the marina sector here. With more marinas for yachts and boats, it can earn tourist dollars generated from docking fees, ration stocking and re-fuelling facilities,” the source said.

According to him, bidders are allowed to submit their development concept for the site. However, the inclusion of affordable housing units is a pre-requisite for the area.

The source said there would also be three-levels of parking bays underground for buses and lorries — currently parked illegally in housing areas — and private vehicles.

“Within the eco-town above ground, fuel-powered vehicles will be barred. Only electric-powered vehicles and bicycles will be allowed. The state is keen on preserving the safety and environmental aspect of the area,” the source said.    

The Jelutong landfill, established in 1992, was the sole sanitary waste dump site for Penang island and was closed in 2002. However, it was later converted into a site for construction and demolition (C&D) waste. Over the decades, the accumulated waste amounting to 12.5 million tonnes grew to a height of 38m, the source said.

The source added that 70% or eight million tonnes of the waste at the site (when bored) consisted of C&D refuse.

Companies interested in participating in the RFP will be encouraged to form consortiums to submit proposals to not only develop the site, but also “harvest” the waste from the site.

The waste is estimated to cost from RM200 million to RM300 million, said the source, adding that consortiums should include experts in urban planning, sea reclamation, construction, and solid waste management.

“All the materials from the site can be recovered and recycled. There are various technologies for harvesting and crushing the C&D waste,” the source added.

As such, the source said that a waste generation policy coupled with a series of dialogues with the manufacturing and construction industries, and the public will be implemented this year to ensure zero waste.

“PDC has also indicated a requirement be added in the RFP urging interested companies to propose an alternative site for C&D waste once the Jelutong landfill is shut down.

“The state has already implemented the organic waste policy, thus the issue now is the question of where the C&D waste goes in the meantime.

“Developers can be asked to crush rocks and cement blocks that can be re-used for pavements.

“The steel bars used for piling can also be recycled. As for wood waste, it can be chipped and used as topsoil for landscaping. Alternatively, developers can engage a company to take the waste out for a fee,” the source said.

When contacted, State Local Government, Traffic Management and Flood Mitigation committee chairman Chow Kon Yeow confirmed that the documents were being finalised and that PDC will make the announcement in February.

This article first appeared in The Edge Financial Daily, on January 28, 2015.

Malaysia not on foreign property investors’ radar, says MKH’s Eddy Chen

KUALA LUMPUR: Some property developers had recently observed that the weaker ringgit could lure foreign investors to Malaysian properties but MKH Bhd ( Financial Dashboard) managing director Tan Sri Eddy Chen does not seem to think so as he opines that Malaysia is just not on their radar.

“Foreigners are very savvy investors and to them Malaysia is not a target,” Chen told the floor at the 17th Malaysia Strategic Outlook Conference today.

Chen, who was one of the speakers invited to share his views on the country’s property outlook this year, said this was evidenced from how local property prices had remained cheap relative to more developed markets like Hong Kong in the past 20 years.

The government’s cooling measures on the property sector – including the one by Selangor that limit foreign property ownership to properties costing more than RM2 million in certain areas of the state - had not helped matters, he said, adding that foreigners investing here will have substantial difficulty offloading their properties later.

“How many property developers do you know who are building properties over RM2 million? There are not many but there may be pockets of property that can be foreign-driven.” he said.

He added that historically, foreign property investments in Malaysia stood at about 2-3% but in certain areas like Iskandar Malaysia, Johor, the figure could reach 30-35%.

REI Group of Companies CEO and co-founder Dr Daniel Gambero agreed with Chen’s view that foreign investors’ participation in the local property market is low.

“How can we attract foreigners when set the cap at RM2 million? We should find different ways of attracting foreigners in terms of values,” he said.

Gambero suggested that other investment grade products for the property market should be designed in order to stimulate the market.

He also observed that it would be impossible for the supply of affordable homes in the market to meet demand.

“In Budget 2014, the government announced the launch of more than 150,000 low-cost houses [but] the actual launch of low-cost houses in the past 12 months was only 10,000,” he said.

The conference was organised by the Asian Strategy and Leadership and Leadership Institute or ASLI. - The Edge Market

Hua Yang set to buy more land in mainland Penang

Hua Yang Bhd's maiden foray into mainland Penang is expected to pave the way for more land acquisitions over the next 12 months, Kenanga Research said.

It said the forecast is made based on the RM250 million sukuk programme which the company has put in place to finance such acquisitions.

"It has always been the management's key focus to replenish its landbank.

However, the recent land acquisition marks Hua Yang's maiden foray into Penang's mainland property market," it added in a research note.

Yesterday, Hua Yang announced the acquisition of two parcels of land in Bukit Mertajam, measuring about 3.25 hectares, for RM31 million.

Kenanga Research has maintained its "market perform" view on Hua Yang and maintained the target price at RM2.20. – Bernama, January 27, 2015.

Hua Yang plans RM243mil project

PETALING JAYA: Hua Yang Bhd plans a mixed development project on 4.9 acres in Penang with a gross development value of RM242.8mil.

It said in a filing with Bursa Malaysia yesterday that it had signed a conditional agreement with Goldentime Project Sdn Bhd to buy the freehold land for RM21.98mil.

Hua Yang proposed to develop 720 service apartments and 36 shoplots on the land. - The Star

CapitaMalls to buy Tropicana assets

PETALING JAYA: After talks to acquire Tropicana City Mall and Tropicana City Office Tower lapsed more than a year ago, CapitaMalls Malaysia Trust (CMMT) is revisiting the acquisition of the two properties for RM540mil.

Including the acquisition fee and expenses, the total acquisition cost amounted to RM565mil, CMMT said in a statement. 

In 2013, the price tag for the transaction was believed to have ranged between RM550mil and RM650mil but the deal fell through due to disagreement on the sale and purchase terms between CMMT and the vendor, Tropicana Corp Bhd. 

Sources said Tropicana intended to sell the two buildings at a higher price. 

This time, CMMT intends to fund the proposed acquisition through debt and/or equity fund raising in such combination to be determined later. It expects the transaction to be completed by the third quarter of this year. 

Manager of CMMT, CapitaMalls Malaysia REIT Management Sdn Bhd (CMRM), said the proposed acquisition was subject to the satisfactory completion of due diligence, which included a building audit and valuation exercise. 

“The completion of the sale and purchase is further subject to fulfilment of various conditions precedent in the agreement signed,” it added. 

CMRM chairman David Wong Chin Huat said the proposed acquisition would expand CMMT’s income and geographical portfolio so that it could continue to deliver stable returns for its unit holders. 

“Tropicana City Mall is located to the west of Kuala Lumpur targeting the rising middle and upper-middle income population,” he said. 

CMMT’s portfolio includes Sungei Wang Plaza in Kuala Lumpur, The Mines in Seri Kembangan, East Coast Mall in Kuantan, Pahang and Gurney Plaza in Penang. 

Tropicana would see its borrowings narrow to RM1.95bil from RM2.41bil and net gearing improve to 0.52 times from 0.72 times upon the disposal of the assets. 

“This disposal is another key milestone in the group’s de-gearing initiative aimed at monetising the significant value of its sizeable asset base and further enhancing shareholder returns,” Tropicana said in a separate statement. The property developer intends to utilise RM460mil to repay its debts, RM75.5mil for working capital and RM4.5mil for the expenses of the transaction. 

Tropicana expects to register a fair value gain of RM13.1mil for the financial year ended Dec 31, 2014 (FY14) with an additional disposal gain of RM13.5mil to be recognised in FY15 from the proposed sale. 

Based on Tropicana’s FY13 figures, the two buildings’ net book value of RM521mil gives the developer a fair value gain of RM197mil after taking into account total development cost of RM324mil. 

However, the assets would no longer contribute to Tropicana’s earnings following the completion of the sale of the properties, which contributed RM21.8mil (excluding any fair value adjustments) to its net profits for FY13. 

The two freehold commercial buildings, situated at SS20/27, Petaling Jaya, are worth RM532mil based on C H Williams Talhar & Wong Sdn Bhd’s appraisal dated yesterday. 

Tropicana City Mall comprises four storeys of retail space and four levels of car park. It opened in December 2008 with a net lettable area of 448,248 sq ft. - The Star